Interpretation of International Investment Treaties

This book offers a systematic study of the interpretation of investment-related treaties - primarily bilateral investment treaties, the Energy Charter Treaty, Chapter XI NAFTA as well as relevant parts of Free Trade Agreements.

The importance of interpretation in international law cannot be overstated and foreign investment law is no exception. Indeed, most treaty claims adjudicated before investment arbitral tribunals have raised and continue to raise crucial and often complex issues of interpretation. The interpretation of investment treaties is governed by the relevant rules of the Vienna Convention on the Law of Treaties (VCLT), which reflect customary international law. The disputes related to these treaties, however, are very peculiar as they oppose a multinational company (or a natural person) to a sovereign government. The parties to the treaty and those to the dispute, therefore, do not coincide. This calls for a balanced interpretation that takes into account both the prerogatives of the sovereign State and the legally protected interests of the foreign investor.

Fundamental questions dealt with in the study include the following: are investment treaties a special category of treaties for the purpose of interpretation? How have the rules on interpretation contained in the VCLT been applied in investment disputes? What are the main problems encountered in investment-related disputes and are these problems peculiar to this type of dispute? To what extent are the VCLT rules suited to the interpretation of investment treaties? Have investment tribunals developed new techniques concerning treaty interpretation? Are these techniques consistent with the VCLT? How can the problems related to interpretation be solved or minimised? How creative have arbitral tribunals been in interpreting investment treaties? Are States capable of keeping effective control over interpretation?

The book takes a practical and problem-solving approach firmly based on arbitral awards and State practice and follows, to a large extent, the structure of the articles on treaty interpretation contained in the VCLT.